PENSIONS FOR ALL

New Zealand Herald, Volume LXXV, Issue 22971, 24 February 1938, Page 12

PENSIONS FOR ALL

GOVERNMENT'S PLAN FORECAST OF MEASURE 30/- WEEKLY MENTIONED THE TAXATION ASPECT [BY TELEGRAPH —SPECIAL REPORTER] WELLINGTON", Wednesday Officially the greatest secrecy is still being maintained about the provisions of the Government's national superannuation scheme, on the preparation of which the law draftsman is now busy, but from the latest information available there appears to be every reason to accept as a certainty the fact that the Government is aiming at £3 a week as the basis of the minimum benefit for superannuitants. It is apparently proposed to pay superannuation or pensions on the basis of 30s a week each for a husband and wife, thus providing the total benefit of £3 weekly. No confirmation of this figure can be secured from official sources, but it is freely spoken of about Parliament Buildings as the figure decided on and now being written into legislation, along with the other major provisions of the plan. Of course, from that basis there will have to be various modifications, according to age and circumstances, but apparently the minimum individual benefit under the scheme will bo the 30s. Effect on Unemployment Tax This figure would not bring the benefit payable to a married couple much above the joint income figure now available under the existing pensions scheme. The Government has aimed always at increasing pension rates, and it is safe to assume that this new national scheme will not involve any decrease of payments now available, so that, on a comparative basis, 30s a week, or £3 a week for a couple, seems a very likely figure to aim at.

It also appears certain that under the scheme of superannuation the lowering of the existing pension age will make possible a large enough reduction in the ranks of the unemployed to enable the abolition of the unemployment tax. That this would be done was suggested from the Government side more than a year ago, and from what can be heard in official circles the tax will go. or at least will be transferred and become part of the taxation necessary to finance the scheme. After that it is reported that unemployment will be paid for out of the Consolidated Fund, which, relieved of the major liability for pensions, would be in a position to meet that expenditure.

Actuarial Formula It is stated that the Government's gravest difficulty when preparing the scheme was not to find a means of financing its launching, but to arrive at an actuarial formula which would ensure successful working in years to come. Those preparing the scheme were faced with one vitally important fact apparently when advised that at the present rate of the population increase in the Dominion the time might come when the number of young workers coming into the plan ?s contributors might bo so small that the scheme would fail to be self-support-ing and the expenditure taken by superannuitants would outbalance the payments into the fund. Already, it was pointed out, the number of young people approaching the age where they will enter industry and become earners was showing a startling decline. This factor was, it is stated, one of the most serious obstacles facing the preparation of the scheme. Obstacles Overcome Another eventuality which had to be considered was the effect on the scheme of any sudden increase in unemployed, who would pass from a contributing to a non-contributory basis, and thus rob the scheme of considerable revenue. However, it appears that these obstacles were overcome, at least on paper, and that no major modifications have been necessary on the plan as it was originally conceived by the Government. One reliable authority stated to-day that the Government was particularly pleased with the progress made, and had found that many major objections,* which earlier had loomed largely in the discussions, were removable. He also stated that it had been discovered that the launching of the scheme was not going to involve anything like the financial commitments currently reported as being necessary.